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Australian bank stocks soar as investors hopeful of further rate cuts

Australian banks witnessed increased buying today as hopes of further interest rate cuts were heightened on lower-than-expected inflation. Banks took Australian shares to highest close in 5 weeks. Dow Futures rose 31 points and the Shanghai Composite Index added 28.4 points, or 1.3%.
Australian bank stocks soar as investors hopeful of further rate cuts

Australian banking stocks led the gainers today as weak inflation data left open the possibility of further interest rate cuts.

The All Ordinaries rose 81.6 points, or 1.6%, to 5,084.2 points, while the benchmark S&P/ASX 200 jumped 86.2 points, or 1.6%, to 5,102.4 points.

The latest Bureau of Statistics data showed an increase in headline inflation of 0.4% quarter-to-quarter, and 2.5% year-on-year.

Citi senior economist Joshua Williamson told The Sydney Morning Herald it was quite surprising because the first quarter of the year was generally a quarter of strong seasonal price increases.

"There was a fairly wide weaker result than expected across the board for most of the important indicators."

The broader Financials sector outperformed with a 117.8 point, or 2.1%, surge to 5,681.6 points.

The big four banks were all top dollar risers today with Commonwealth Bank of Australia (ASX: CBA) leading the charge on a A$1.69, or 2.4%, jump to $71.70.

Westpac Banking Corporation (ASX: WBC) followed suit with a $0.79, or 2.5%, rise to $32.50, while National Australia Bank (ASX: NAB) added $0.69, or 2.1%, to close at $32.76 and ANZ (ASX: ANZ) climbed $0.65, or 2.2%, to $29.90.

Macquarie Group (ASX: MCQ) rose $0.53, or 1.4%, to $37.58.

The Healthcare and Industrials sectors also outperformed today with gains of 305.1 points, or 2.4%, and 76.6 points, or 2%, respectively.

Healthcare ended on 12,918.5 points, while Industrials closed at 3,862 points.

In the Healthcare sector, biopharma CSL (ASX: CSL) moved up $1.88, or 3.1%, to $62.75, while private hospital operator Ramsay Health Care (ASX: RHC) closed $0.95, or 3%, higher at $32.82.

Meanwhile, of the Industrials players, construction giant Leighton Holdings (ASX: LEI) soared $0.81, or 4.2%, to $19.85.

Engineering group Monadelphous Group (ASX: MND) gained $0.89, or 4.3%, to close at $21.39.

Miners in recovery

The Materials sector made a recovery today as some of the mining heavyweights regained ground.

The broader sector put on 94.5 points, or 1.1%, to finish at 9,050 points.

Rio Tinto (ASX: RIO) led the miners with a $0.84, or 1.6%, jump to $54.68. Fellow major BHP Billiton (ASX: BHP) climbed $0.34, or 1.1%, to $31.70.

Gold producer Newcrest Mining (ASX: NCM) closed in the green today, adding $0.01, or 0.1%, to end at $16.46.

Resolute Mining (ASX: RSG) closed $0.06, or 6.9%, higher at $1.

Woodside leads Energy stocks again

The Energy sector made good headway today with a 182.3 point, or 1.4%, surge to 13,061.5 points, led for a second day by Woodside Petroleum (ASX: WPL).

The oil and gas major pushed higher $0.78, or 2.1%, to $38.74.

Engineering giant WorleyParsons (ASX: WOR) rose $0.63, or 2.8%, to $23.35, while Santos (ASX: STO) closed flat at $12.27.

Oil Search (ASX: OSH) climbed $0.14, or 1.9%, to $7.44.

U.S. markets

U.S. stocks soared overnight on upbeat earnings, and the market also recovered from a fake tweet on the Associated Press's twitter feed about a terror attack on the White House – which briefly sent equity prices into a tailspin.

By the close the Dow Jones had soared 152 points to 14,719 points, while the NASDAQ jumped 36 points to 3,269 points.

Asian stocks

Hong Kong’s Hang Seng was up 350.4 points, or 1.6%, to 22,156.9 points and Japan’s Nikkei added 313.8 points, or 2.3%, to 13,843.5 points.

The Shanghai Composite Index rose 28.4 points, or 1.3%, to 2,212.9 points.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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December 13 2016

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